Although the government should not due to organic principles be considered one and the same as We the People, the government aught not to be needlessly vilified and equated with totalitarianism as soon as it exerts any form of centralized control. I won't argue this point here in any great length since it deserves a well thought through post in its own right. Suffice to say that I would claim that a stable society, in fact any system per se, perfectly balances centralized and local control. A perfect government allows We the People to regulate the government through occasional intervention (such as elections), potentially overthrowing the established order without reverting to violent revolt.
Unfortunately, in our global economy equating national debt with a debt to ourselves is no longer even remotely accurate. We are no longer playing a Ponzi scheme with ourselves and our grandchildren. We are now a bunch of strangers fueling each others excesive expansion and consumption, hoping, praying that the other ones won't get cold feet. I'm not trying to argue that incuring debt is fundamentally wrong. People and businesses need to be able to borrow money to further their (and thereby society's) progress. What I am arguing is that it's wrong for governments to incure debt when their is a more direct and transparent way for them to raise money for communal needs such as education, public transportation, law enforcement and basic health care. The government is the only entity in society that can legitamtely levy cumpolsory taxes. It does not need to borrow money if it has none.
Here it's certainly necessary to distinguish nations with emerging economies from nations with well established economies that are politically integrated into higher structures. The State of New York can receive adequate tax funds from both its own population as well as the entire tax base of the U.S. Federal Government. Burundi, on the other hand, is hard pressed to lift itself out of its own poverty. It depends on external funds for its progress. Creating incentives for such investments is important. I'm more focused on countries like the U.S.. But that said, I believe that even in the case of Burundi, intergovernmental lending and borrowing may not be the answer. Such lending does not seem to have had a great track record for equalizing the wealth discrepancy between nations. The answer I suspect is in local micro-funding at the private level, thereby generating a healthy private sector that the government can levy its taxes against.
The argument for issuing bonds often focuses on the effectiveness of offsetting costs to a time when a project is completed and capable of generating a benefit (or revenue) for its constituency. Seen from this perspective, even a transfer of cost to another generation can seem legitimate. Why should I have to pay now for something I will not immediately benefit from? The problem with such intergenerational arguments is that it assumes our capability to know what will be of any benefit. Every project is associated with a risk which burden only those who decide to be involved with the project should carry. When we engage intergenerational projects, who should shoulder the risk? Those who decide to engage in the project or those who those who engage in the project believe will benefit from it?
Imagine if I took out a loan to send my two young sons to an extremely expensive elementary school and put the loan in their name. I keep paying only the interest on the loan until they graduate from high school. At that point the full principle becomes due. But since its in my boys name, I wash my hands and leave it up to them. Okay, maybe I'm a little more generous and I extend the maturity to a point when I think they might be able to pay for it, say age 30. Would that be fair? They are, after all, the primary beneficiaries of their elementary school education. The glaringly obvious problem, of course, is that they did not have the capacity to consent! I chose their elementary school based on my belief of what their future aught to entail.
To me, this metaphor clearly illustrates that issuing any government bonds with a maturity beyond 15 years is unacceptable. I say 15 because that seems to be the rate at which culture switches from one generational view to the other. And 15 years is the average age it takes for a person reach maturity (even if you're really not truely matured untill you hit 50). One could argue that the longest maturity should be half of a lifespan. which (ignoring population growth) is roughly when those when those who could consent start becoming the minority. At some point I will hopefully have a little more time available to mathematically model what the maximum acceptable length of time for a bond to mature aught to be.The problem is that the ability to issue bonds always creates the temptation to defer the debt by issuing yet another bond to pay for bonds that are about to mature. I'm leaning towards finding bonds an all together unacceptable means to raise government funds. If bonds are to be issued at all, they should always be issued only with a direct consent from a strong majority of the entire electorate (through referendums). And at their date of maturity, the should definitively be paid back through additional taxation specifically marked as a repayment for that specific public debt. This would make the whole electorate fully aware about their previous profligacies (and thereby to some extent establish Ricardian equivalence) without the need for a complete economic meltdown.